Amazon to shut down US telehealth service as it shifts industry ambitions

Amazon is shutting down its telehealth service, Amazon Care, ending an ambitious plan to roll out its local platform to ‘millions’ of patients across the country, part of a long-standing goal to disrupt the industry American Health.

A memo sent to Amazon Care staff on Wednesday by Neil Lindsay, head of Amazon Health Services, said Amazon Care – which promised a doctor, nurse or other medical professional on demand, 24 hours a day 24 – was not the right “long-term solution”. for outside companies she hoped to sell the service to.

“This decision was not taken lightly and only became clear after several months of careful consideration,” Lindsay wrote, according to the memo seen by the Financial Times.

“While our registered members have loved many aspects of Amazon Care, it’s not a comprehensive enough offering for the large enterprise customers we are targeting.”

Analysts said Amazon Care’s closure, which will come at the end of the year, should not be seen as a setback to its efforts to gain a foothold in the $4 billion U.S. healthcare industry. “This is by no means a sign of failure,” said Natalie Schibell of Forrester Research. “It’s a strategic decision.”

Amazon’s move comes after its recent deal to acquire One Medical, a sprawling network of primary care providers, for $3.9 billion – its largest healthcare deal.

This takeover, if approved by regulators, would provide Amazon with much of the access to company employees it was seeking with Amazon Care, said Christina Farr, health technology investor at Omers Ventures, making the internal platform redundant. Companies such as Google offer One Medical to employees.

“One Medical already has all these contracts and is doing telemedicine,” Farr said. “It made sense for Amazon to acquire an existing network. Recruiting doctors is very difficult, establishing insurance contracts is very difficult, establishing relationships with employers is very difficult. All of these things take a long time and One Medical was available for purchase.

With a workforce of over 1.5 million, more than 200 million Prime subscribers worldwide, and an extensive logistics and cloud computing infrastructure, Amazon has long been seen as uniquely placed to take on some of the incumbents. from the healthcare sector – whose stock price drops, albeit briefly, each time the company announces offers.

Amazon’s healthcare ambitions have been brewing for years and are set to ramp up under the leadership of Andy Jassy, ​​who replaced Jeff Bezos as chief executive last year.

Amazon is also among the bidders for Signify Health, a home healthcare provider, which is courting several bids. The move to explore a deal, which would be Amazon’s fourth big healthcare deal in recent years, underscores the company’s willingness to test the appetite of antitrust regulators to limit its M&A strategy. . Amazon and Signify declined to comment.

“They call [Lina] Khan’s bluff,” said a veteran investor who follows Signify’s bid, referring to the chairman of the Federal Trade Commission and a critic of Amazon’s market power.

Another attorney said Amazon is demonstrating a willingness to go to court with regulators if necessary.

“Amazon’s healthcare business is small compared to others in the United States,” said a competition attorney who asked not to be named for reasons of client confidentiality. “At this time, any acquisition that is not a mega-player in the space will not be blocked.”

A person who has worked with Amazon said he was prepared to deal with political and media backlash, but was confident a deal to buy Signify would gain regulatory approval.

“They are happy to go to court,” the person said. “They know they can win, so they’re not letting antitrust rhetoric in DC stop them from considering buying an asset.”

An FTC spokeswoman would not comment on Amazon’s health care agreements, but pointed to comments made by Khan at a forum this year in which she said the health care industry “life or death” was “one of the most critical” his agency had to consider.

A $5 billion takeover of homecare provider LHC Group by UnitedHealth, a major insurer, has been delayed while the FTC seeks more information about the proposed deal.

Ultimately, Amazon’s M&A activity indicates it’s assembling the building blocks of a large healthcare service offering “value-based care,” said Rebecca Springer, senior analyst covering healthcare. Health at PitchBook. The term describes a business model in which healthcare providers earn income based on patient outcomes – the patient’s health status – rather than simply providing treatments.

Amazon to shut down US telehealth service as it shifts industry ambitions

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